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Bring Down the Curtain on a Sad Equitable Saga

May 26, 2007


No one can deny that between them chairman Vanni Treves and chief executive Charles Thomson have done an excellent job in the past six years steering Equitable Life from the brink of financial disaster.

Treves has had a massively calming influence on the mutual while Thomson, though dreadfully overpaid, has skilfully managed to dismantle the business bit by bit without the remainder folding in on itself.

Out of the window has gone the University Life subsidiary (sold to Reliance Mutual), Equitable Life's nonprofits business (to Canada Life) and in the near future its with-profits annuities book to Prudential, provided the latter does not break up itself. If the Pru deal goes ahead, all that will be left is Equitable's rump of a closed with-profits book.

Last Thursday, Treves and Thomson went head to head with a diehard core of some 200 policyholders at the mutual's annual meeting in Westminster, central London. Financial Mail was witness to a low-key affair with only two moments of high amusement.

The first was when a policyholder thanked Thomson for his sterling work, to which Treves replied that in light of such praise, his chief executive would no doubt be demanding yet another pay rise within 48 hours. Thomson was paid close to Pounds 673,000 last year.

The second was when a fearless elderly policyholder berated Thomson for receiving 'obscene' bonuses while she and others like her had seen their Equitable pensions halved in value. Equitable's remuneration expert put up a defence, but it was unconvincing.

But the mood throughout the hour-and-three-quarters of questions was more funereal than optimistic. This was not helped by confirmation of news revealed last week in this newspaper that the Parliamentary Ombudsman's report into regulatory failings at the time of the mutual's near-collapse in 2000 has been delayed yet again.

This report, much-awaited by policyholders past and present, could pave the way for Government compensation, though given Labour's dismissive attitude to previous Ombudsman findings, namely on the issue of proper compensation for victims of failed pension schemes, a call for payouts could be ignored.

It looks as if the Ombudsman will not stop dotting i's and crossing t's until the autumn. For policyholders, many of whom have seen their retirement dreams shattered as a result of their imploding Equitable policies, this is another blow in a series that has left them black and blue.

While all involved with Equitable wait for the Ombudsman's report, I trust that Treves and in particular Thomson will work overtime to complete the 'rescue' of this mutual.

The final piece of the jigsaw is a swift sale of the remaining with profits business to a competitor that will promise to give Equitable's policyholders the tender loving financial care they have craved for more than six years.

The sooner that is done, the better. The Equitable drama has dragged on for far too long. It's high time for the final curtain.

HATS off to the financial services arm of Post Office for welcoming on board its one-millionth customer.

Launched in March 2004, with Bank of Ireland as a joint partner, this productive part of the moribund Post Office empire has thrived despite turmoil in the branches (see Pages 12 and 13).

The Post Office says it sells one in 50 of all car insurance policies while last year it issued one in every 25 new credit cards. It has also made inroads into the home insurance and travel insurance markets. Half of this business came through the post office branch network.

Such figures show that parts of the Post Office empire can be run successfully especially when Government ministers keep their grubby hands off them.

WE have received several calls from old customers of Woolwich, who have experienced appalling problems resulting from the transfer of their savings or current accounts to Barclays. This follows Barclays' decision to get rid of the Woolwich savings brand and house the latter's 3.8 million savers under its own brand.

Some Woolwich customers complain about personal identification numbers sent by Barclays to access their accounts not working, leaving them unable to bank online. Others refer to payments into their accounts being bounced. These problems have been compounded by less-than understanding Indian call centres.

Barclays insists that the migration of Woolwich savers is working well, with more than a third of accounts successfully transferred. The rest, it says, will move before summer ends.

It says that 98 per cent of customers will be no worse off for having their money in a Barclays account.

We beg to differ. Woolwich customers who have found the transfer of their savings to Barclays a truly tortuous experience should send details to my email address below.

(c) 2007 Mail on Sunday; London (UK). Provided by ProQuest Information and Learning. All rights Reserved.

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